Concrete Pumping Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 9 - Leases

Note 9 - Leases

12 Months Ended

Oct. 31, 2023

Notes to Financial Statements

Operating and Finance Leases [Text Block]

Note 9. Leases

General

Lease expense consisted of the following:

	Classification on the Consolidated Statement of Operations	Year Ended October 31,			Year Ended October 31,
(in thousands)		2023			2022
Operating lease expense	General and administrative expenses	$	6,522		$	5,002
Short-term and variable lease expense	General and administrative expenses		686			975
Finance lease expense:
Amortization of right-of-use assets	General and administrative expenses		22			22
Interest on lease liability	Interest expense, net		9			13
Total finance lease expense		$	30			35
Sublease income	General and administrative expenses		(85	)		(106	)
Total lease expense		$	7,153		$	5,906

Supplemental consolidated balance sheet information and other information related to leases:

(in thousands)		October 31,			October 31,
Leases	Classification on the Consolidated Balance Sheet	2023			2022
Assets:
Operating lease assets	Right-of-use operating lease assets	$	24,815		$	24,833
Finance lease assets	Property, plant and equipment, net		680			702
Total leased assets			25,495			25,535
Current liabilities:
Operating	Operating lease obligations, current portion	$	4,739		$	4,001
Finance	Finance lease obligations, current portion		125			109
Noncurrent liabilities:
Operating	Operating lease obligations, non-current		20,458			20,984
Finance	Finance lease obligations, non-current		50			169
Total leased liabilities		$	25,372		$	25,263

Weighted-average remaining lease term (years)
Operating leases			6			7
Finance leases			2			3
Weighted-average discount rate
Operating leases			7.1	%		6.0	%
Finance leases			3.8	%		3.7	%

Supplemental consolidated cash flow statement information related to leases:

(in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,278	$	4,798
Financing cash flows from finance leases		109		115

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease and finance lease liabilities recorded on the Company’s consolidated balance sheet as of October 31, 2023:

	Future Payments
(in thousands)	Operating Leases			Finance Leases
2024	$	6,267		$	120
2025		5,543			61
2026		4,505			-
2027		4,001			-
2028		3,387			-
Thereafter		7,913			-
Total lease payments	$	31,617		$	181
Less: Interest		(6,420	)		(6	)
Total lease payments	$	25,197		$	175
Less: Current portion		(4,739	)		(125	)
Long-term portion	$	20,458		$	50

As of October 31, 2023, we had no material operating or finance leases that had not yet commenced.

Related Party Leases

The Company has two related party leases. Eco-Pan leases its facility in Pacific, Washington from an investor group in which Bruce Young, the Company’s Chief Executive Officer, holds an approximately 25% interest. Camfaud leases its facility in Essex, England from a trust the trustees of which include Tony Faud, the Company’s Managing Director — U.K., and members of his family.

The following is supplemental consolidated balance sheet information and other information related to related party leases:

(in thousands)		October 31,		October 31,
Leases	Classification on the Consolidated Balance Sheet	2023		2022
Assets:
Operating lease assets	Right-of-use operating lease assets	$	2,972	$	1,299
Current liabilities:
Operating	Operating lease obligations, current portion	$	284	$	132
Noncurrent liabilities:
Operating	Operating lease obligations, non-current		2,669		1,174
Total leased liabilities		$	2,953	$	1,305

For the years ended October 31, 2023 and 2022, $0.6 million and $0.2 million respectively were included in cost of operations on the consolidated statement of operations related to related party leases.